"The number of people accessing private medical care without insurance has hit a fourth quarterly decline, narrowing the so-called ‘insurance gap’ in the sector."
According to research by consultancy Broadstone, self-paid admissions to private medical treatment have been declining for a full year – a steady decline which Broadstone suggests is due to cost of living pressures and rising inflation.
The report, the Broadstone Insurance Gap Index, tracks the changes in self-pay and insured private medical treatments alongside NHS waiting lists, with data going back to the start of 2019.
Statistics from the British Medical Association show that 7.21 million people were waiting for NHS treatment in January 2023 – with 3.0 million of them waiting over 18 weeks and 379,245 waiting over a year. This last number shows the sharpest contrast to pre-Covid waiting times: it is 231 times higher than those waiting more than a year for treatment in January 2020.
Demand, therefore, is high for private medical treatment.
However, rising inflation across 2021 and 2022 – reaching a 41-year high of 11.1% in October 2022 – and general cost of living increases have left 92% of households reporting in January that their cost of living was higher than a year earlier.
With the price of private medical treatment reaching into the thousands, even commonly-sought treatments could be out of reach for many. A hip replacement costs an average of £12,825, while even comparatively small procedures such as colonoscopy costs on average £1,994 – and diagnostic procedures such as scans costing into the hundreds of pounds.
Comparatively, the average yearly premium for private health insurance in the UK is £1,500 according to financial advice firm Unbiased – with many paying less, depending on circumstances.
While insured admissions to private medical treatment lagged behind pre-pandemic levels in 2021, by Q3 2022 there were the highest post-pandemic number of admissions with an insurance policy attached.
Brett Hill, Head of Health & Protection at Broadstone, said:
“After sustained and serious increases in NHS waiting lists, we were always likely to see increased demand for private healthcare.
“In the immediate aftermath of the pandemic this was broadly driven by self-pay as those with an urgent need for medical treatment dipped into savings they had built up during successive lockdowns, rather than face a long and uncertain wait for NHS treatment.”
“While insurers reported high claims volumes during 2022, many claims were for mental health conditions that require d access to talking therapies, or outpatient diagnostic tests that didn’t immediately lead to hospital treatment as claimants chose to defer treatment for non-urgent conditions while they prioritised the recovery their businesses. We expect these deferred claims to feed through in the data over time."
“We hear anecdotal reports from hospital providers and insurers of robust demand for treatment funded by private medical insurance through the end of 2022 and into 2023, and we see more businesses recognising the need to invest in the health of their workers and are implementing or expanding employee PMI schemes."
“If these trends continue we expect the insurance gap to narrow further in the next two quarters of the Index.”
